Alveolization represents the final phase of lung development in which large primary alveolar spaces are partitioned into smaller air spaces by inward protrusions of septae derived from the alveolar walls. During alveolization, expansion of the vasculature involves the process of angiogenesis in which new vessels arise from preexisting ones. This suggests that molecules, such PECAM-1, which regulate endothelial cell activity required for angiogenesis are likely to be important for alveolization. Our hypothesis is that during lung development, angiogenic stimuli initiate PECAM- 1 dependent ligand interactions that trigger PECAM-1 tyrosine phosphorylation and an association of endothelial PECAM-1 with SHP-2. This facilitates the recruitment of SHP-2 to the membrane surface, where it mediates the dephosphorylation of focal adhesion proteins, leading to increased turnover of focal adhesions and enhanced endothelial cell motility. These PECAM-1 dependent activities facilitate efficient angiogenesis and thus alveolization. Three specific aims are proposed: Specific Aim 1. Characterize the effect of the loss of PECAM-1 on murine alveolization. The phenotype of alveolization ([unreadable] retinoic acid treatment) in PECAM-1 null mice will be characterized at a morphological, cellular, and functional level by determination of (i) lung morphology (ii) lung physiology and (iii) lung endothelial cell content. Specific Aim 2. Define the role of SHP-2 in mediating [unreadable] PECAM-1-dependent cell motility. Stable cell transfectants expressing PECAM-1 will be transduced with adenoviral vectors encoding one of three SHP-2 dominant negative constructs bearing mutations in the catalytic domain, the C-terminal domain that mediates interactions with scaffold proteins or in both regions. Transduced cells will be analyzed for (i) the number and distribution of focal adhesions; (ii) the occurrence of critical focal adhesion tyrosine phosphorylation events; and (iii) cell motility using established in vitro models of cell migration and tube formation. Specific Aim 3. Determine the role of PECAM-1 tyrosine phosphorylation during in vivo angiogenesis and alveolization. Transgenic mice will be generated on the PECAM-null background that express in an endothelial-restricted manner, either wild type PECAM-1, or PECAM-1 in which Y663 and Y686 have been mutated. In vivo angiogenesis and alveolization will then be studied in these animals. These studies will further our understanding of molecular basis of alveolization and may provide insights into new approaches for regenerating functional alveoli in premature infants with bronchopulmonary dysplasia and adults with emphysema or fibrotic lung disease. [unreadable] [unreadable]